Middle East Analysis

Middle East Analysis

The Bush Administration and Irans New President

Imagine a religious neo-conservative president who won election without fraud. That’s what Bush has to deal with in Iran. Here’s an in-depth analysis.

This article was made available through the news service of Foreign Policy in Focus. Foreign Policy in Focus has kindly granted us permission to share top articles with the readers of the Progress Report.

by Arang Keshavarzian

Mahmoud Ahmadinejads election victory in late June was a surprise for pundits both inside and outside Iran. Not only did the proverbial favorite Akbar Hashemi-Rafsanjani not win, but the turnout was around 60% in both rounds, so the much-debated election boycott did not reduce participation to historic lows. Ahmadinejad, Tehrans mayor, with the help of the security-military apparatus, mobilized his conservative base in the first round of balloting to force an unprecedented second-round runoff against Hashemi-Rafsanjani. The mayor then reached out to the political independent masses to win over 60% of the vote. The unpredictability and close nature of the result (as well as of Mohammad Khatamis victory in 1997) are especially significant in the Middle East, where elections, when they do occur, are often formalities.

Iran now has a 48-year-old devout president with a doctorate in engineering rather than a seminary education. He has been shaped as much by the Iran-Iraq War and the military establishment as by the 1979 revolution and Khomeinis circle of students. To date, Ahmadinejad has been active only in local affairs (Tehran municipality and Ardebil provincial governments), not in national politics. In his campaign he was able to combine his loyalty to Supreme Leader Ali Khamenei and his staunch social conservatism with a Robin Hood-style populist anti-corruption message and a promise to bring oil revenue to the home of every Iranian. Thus, in a remarkable move Ahmadinejad maintained and mobilized his very close ties with the conservative establishmentsuch as the office of the supreme leader, the Islamic Revolutionary Guard Corps, and the volunteer groups of mobilizers (basij)while convincing the common folk that he was one of them. Unlike traditional conservatives, (principally the merchant class and the clerical hierarchy), Ahmadinejad and Irans neoconservatives have cobbled together an electoral base comprising the revolutionary military establishment, war veterans, and the economically disenfranchised to trumpet a message that is as threatening to capital interests as it is to supporters of democratization and pluralism.

Implications for the United States

What does this all mean for Washingtons own neoconservative administration? The night before the first round of elections, George W. Bush described the election as lacking the basic requirements of democracy and predicted that the tide of freedom [that] sweeps this region will also come eventually to Iran. It is correct to criticize Irans electoral process as less than free and fair since unconstitutional interference during the first-round balloting was particularly troubling. However, Bushs harsh words and threats seem awkward in a region where Washingtons closest allies (Egypt, Saudi Arabia, United Arab Emirates, Tunisia, and Jordan) hold utterly meaningless ballots. Moreover, in Iraq, Afghanistan, and the Palestinian Occupied Territories, elections have only taken place under highly restricted conditions. Nonetheless, if Bushs tide of freedom is to wash away the Islamic Republic anytime soon, it will have to contend with the election of Ahmadinejad and the 17 million Iranians that voted for him in the second round of the election.

Within days of Ahmadinejads victory, a doomsday scenario was written by the most interventionist elements of the Washington policy circles. They argued that the arrival of Ahmadinejad with the support of the military apparatus would result in the radicalization of Irans domestic and foreign policy and would thus pose an imminent danger to U.S. interests. Patrick Clawson, an Iran expert at the hawkish Washington Institute for Near East Policy, wrote in the NewRepublic that Iranians elected a proto-fascist as president who bears plenty of resemblance to the Talibans [social conservativism]. Clawson and others feel that Irans election revealed the essentially totalitarian and anti-American nature of the Islamic Republic, and they argue thatas with the Taliban in Afghanistan and fascist regimes in Germany, Italy, Japan, and Iraqthe United States must support democracy in Iran through the bayonet. Ahmadinejad has brought the inevitable confrontation between Iran and the U.S. to a head, asserts Jamie Glazov in the online Front Page Magazine.

Neoconservatives contend that the Bush administration will have to take a tough stand against a less-cooperative and more-unpredictable Islamic Republic and by leveraging various points of advantage. In response to Ahmadinejads administration, Washington could pressure European governments to impose stricter ultimatums and monitoring mechanisms on Irans nuclear program or to cease negotiations altogether. The United States could also take the Iranian nuclear issue to the UN Security Council in order to impose heavy sanctions, a viable prospect under newly appointed UN Ambassador John Bolton. Meanwhile, the Bush administration could more directly support the mélange of monarchists, Islamist Marxists, ethnic separatists, and secular nationalists that make up Irans opposition abroad. And with U.S. troops ensconced in Irans immediate neighbors, Washington could leverage its strategic position to nurture armed opposition to the Islamic Republic.

Given the mushrooming of think tanks and forums aimed at studying and fostering democratization in the Middle East and around the world, the supporters of a more-interventionist U.S. policy toward Iran could continue to offer Iranian dissidents and estranged members of the Tehran government a platform both to mobilize opposition within Iran and to convince greater numbers of Westerners that the Islamic Republic truly is noxious. Clawson, for one, argues for the use of covert operations to induce crippling accidents at Iranian nuclear facilities that would set back the Iranian program.4 Of course the specter of a preemptive strike by U.S. or Israeli forces has never been taken off the table, and with an allegedly more-belligerent government in Tehran, this option may gain greater acceptance. If Ahmadinejads election results in a more-dangerous Iran, Washington will likely use all of these tactics not only to challenge and contain Tehran but to overthrow this founding member of the axis of evil.

New Currents in Irans Foreign Policy?

Whether or not military options are logistically feasible or politically prudent in the context of high oil prices, increasing domestic dissatisfaction with the tragic situation in Iraq, and a uniform European reluctance to break off negotiations with Iran, the very premise presented by the supporters of regime change that the 2005 presidential elections have fundamentally altered the Islamic Republics foreign relations is a faulty one. Irans new president will not necessarily radicalize Iranian politics, especially the countrys foreign policy. In fact, a few days after his victory, Ahmadinejad, probably in response to such fears, stressed that he was in favor of ties with all states as long as they were fair and progressive relations.

Whatever may be Ahmadinejads true intentions, a pragmatic foreign policy is the probable outcome. To begin with, the Islamic Republic tends to moderate ideologically driven politicians be they democrats, Islamist radicals, supporters of a centrally planned economy, or privatization fans. As the lead article by Saeed Laylaz in the reformist newspaper Sharq explained, the Islamic Republics system has the tendency of transforming radicals, revolutionaries, and fundamentalist forces into pragmatists and moderates.5 This is likely to also be the case for the new administration, which, despite its mission to implement sweeping managerial changes, will face a bureaucratic machine full of overlapping institutions and competing interests. Any government fueled by oil revenues tends to sideline long-term plans and ideologies in favor of stopgap measures and personal gain. Hence, despite his supporters aspirations and Washingtons fears, Ahmadinejads Cabinet will face the same institutional dead ends that its more-reformist predecessor faced.

Even if Ahmadinejad and his loyal supporters prove impervious to these structural forces, the Ministry of Foreign Affairs is controlled by Supreme Leader Khamenei, and there is little opportunity for the new and inexperienced president to act independently. In fact, for much of the last eight years, those who sought to downplay Khatamis political powers and importancesuch as the Washington Institute for Near East Policy and the American Enterprise Institutepointed out that foreign policy in Iran is not implemented, let alone dictated, by the president. The Iranian Constitution places foreign relations exclusively in hands of the supreme leader. Thus, if Iran has taken a generally more pragmatic approach to regional and international affairs since the mid-1990s, we have Khamenei to thank as much as Hashemi-Rafsanjani and Khatami. Considering that Ahmadinejad is so closely allied with Khamenei and supporters of the preeminence of his office, it seems unlikely that the new administration will do much more than tow the official line laid down by the supreme leader, as was Khatamis general pattern. Khamenei, meanwhile, has proven himself adept at balancing his interest in remaining in power with Iranian public opinion, which increasingly calls for better relations with the international community. Irans generally quietist and unobtrusive stance vis-à-vis the U.S. invasions and occupations of Afghanistan and Iraq illustrates its unwillingness to play a rogue state role and suffer the economic, if not military, repercussions.

Any claim, however, that Iran under President Ahmadinejad will be no different than under President Khatami or any other president is an exaggeration and ignores the nonideological differences between these administrations. The United States will face a more-confident Islamic Republic whose political elites have maneuvered through eight years of almost continual conflict and challenges. Ahmadinejads victory has forged the most homogenous and uniformly conservative executive branch, legislature, and office of supreme leader in the 27 years of Islamic rule. Tehran has good relations with the new Iraqi government and has maintained negotiations with the European powers while strengthening solid economic and geostrategic ties with China, India, and Russia. The Khatami governments prudent saving of oil revenues over the past few years and prospects for continued high oil prices will allow Tehran to both paper over fundamental economic problems and maintain its investment in technology, both civilian and military. Thus, Ahmadinejad, who lacks Khatamis charm and his ability to quote Western philosophers, will likely project a less-conciliatory foreign policy agenda and more self-confidence. If President Bush continues to categorically chide the Islamic Republic and threaten its sovereignty, then Ahmadinejad, who believes that Iranians under the Islamic Republic have all the freedoms they need, will happily respond by using these external threats to suppress dissent and curtail public participation in the name of national security.

With a seemingly subservient president and potentially fewer domestic critics and rivals in authoritative positions, Khamenei may find greater political opportunity to begin a rapprochement with the United States. Under Khatami, achieving major breakthroughs in U.S.-Iranian relations was a difficult task because the Islamic Republics ideological and tactical differences came to the surface and fueled contentions by critics of U.S.-Iranian détente that the Islamic Republic would collapse if Khatami had his way. Since Khatami was susceptible to criticism from government conservatives that he was not anti-imperialist enough, making too many foreign concessions was politically risky. However, with a unified conservative Islamic Republic, the prospects for meaningful and serious U.S.-Iranian negotiations may increase. Some argue that peace in Israel and Palestine is more likely when hard-liners, such as Ariel Sharon and Hamas, are part of the bargaining process. Likewise, governments driven by neoconservative leaders in Washington and Tehran, rather than administrations headed by the Democratic Party and Iranian reformists who can easily be labeled as soft and accommodationist, may enable credible concessions and discussions to take place. Of course, this would require the Bush administration to sincerely engage in deliberations and to compromise on various issues.

Détente or Democracy?

From the perspective of democrats in Iran, d étente is a frightening scenario and one that has generated considerable debate among politically astute Iranians, the majority of whom do not trust the Bush administrations intentions and good will in standing with the Iranian people. A neoconservative rapprochement between Iran and the United States would lock out democratically minded political figures from the negotiating table. Issues such as freedom of speech and assembly would be downplayed, and regional strategic concernsincluding promises that the United States would neither invade Iran nor establish bases from which to launch attacks against itwould be the dominant points of discussion. If this occurs, the tide of freedom could be stymied by the short-term pragmatic interests of both countries neoconservative presidents.

Arang Keshavarzian is an assistant professor of political science at Concordia University and a contributor to Foreign Policy In Focus (www.fpif.org).

We are Hanno Beck, Lindy Davies, Fred Foldvary, Mike O'Mara, Jeff Smith, and assorted volunteers, all dedicated to bringing you the news and views that make a difference in our species struggle to win justice, prosperity, and eco-librium.

Advertise here.

Arts & Letters

Geonomics is …

the Great Green Tax Shift maxed out”
Economically, taxing pollution and depletion does reduce pollutants and extracts – and thus the tax base; plus such taxes are regressive, requiring a safety net. On the other hand, collecting site rent is progressive and generates a revenue surplus payable as a dividend to residents, which can serve as the safety net.
Environmentally, taxes on waste and extraction do not drive efficient use of land, as does getting site rent. Better settlement patterns do reduce extraction upstream and pollution downstream.
Politically, green fees have less impact if applied locally; local is where grassroots movements have more impact. Yet getting rent usually entails shifting the property tax (or charging user fees), the province of local jurisdictions; both mayors and city voters have been known to adopt a site-value tax.
Ethically, putting into practice “tax bads, not goods” skirts the issue of sharing Mother Earth which collecting rent confronts head on. Since nothing is fixed until it’s fixed right, ultimately, greens must lead humanity into geotopia where we all share the worth of Mother Earth.

shaped by reality. In the 1980′s, the Swedish government doubled its stock transfer tax. Tax receipts, however, rose only 15%, since traders simply fled to London exchanges. Fearing a further exodus, the Swedish government quickly rescinded the tax altogether. (The New York Times, April 20) That willingness to tax anything leads us astray. Pushing us astray is that unwillingness to pay what we owe: rent for land, our common heritage. Assuming land value is up for grabs, we speculate. We cap the property tax on both land and buildings and the rate at which assessments can go up; while real market values rise quicker, assessments can never catch up. Our stewards, the Bureau of Land Management, routinely sell and lease sites below market value, often to insiders, says the Government Accounting Office. Once we grasp that rent is ours to share, we’ll collect it all, rather than let it enrich a few, and quit taxing earnings, which do belong to the individual earner. That shift is geonomic policy.

a study of Earth’s economic worth, of the money we spend on the nature we use, trillions of dollars each year. We spend most to be with our own kind; land value follows population density. Besides nearness to downtowns, we also pay for proximity to good schools, lovely views, soil fertility, etc. These advantages, sellers did not create. So we pay the wrong people for land. Instead, we should pay our neighbors. They generate land’s value and deserve compensation for keeping off ours, as they’d pay us for keeping off theirs. It’s mutual compensation: we’d replace taxes with land dues – a bit like Hong Kong does – and replace subsidies with “rent” dividends to area residents – a bit like Alaska does with oil revenue. Both taxes and subsidies – however fair or not – are costly and distort the prices of the goods taxed and the services subsidized. By replacing them and letting prices become precise, we reveal the real costs of output, the real values of consumers. Then, just by following the bottom line, people can choose to conserve and prosper automatically. A community could start by shifting its property tax off buildings, onto land – a bit like a score of towns in Pennsylvania do; every place that has done it has benefited.

a discipline that, compared to economics, is as obscure as Warren Buffett’s investment strategy, compared to conventional investment theory, about which Buffett said, “You couldn’t advance in a finance department in this country unless you taught that the world was flat.” (The New York Times, Oct 29). The writer wondered, “But why? If it works, why don’t more investors use it?”
Good question. Geonomics works, too. Every place that has used it has prospered while conserving resources. Yet it remains off the radar of many wanna-be reformers. Gradually, tho’, that’s changing. More are becoming aware of what geonomics studies – all the money we spend on the nature we use. Geonomics (1) as an alternative worldview to the anthropocentric, sees human economies as part of the embracing ecosystem with natural feedback loops seeking balance in both systems. (2) As an alternative to worker vs. investor, it sees our need for sites and resources making those who own land into landlords. (3)As an alternative to economics, it tracks the trillions of “rent” as it drives the “housing” bubble and all other indicators. And (4) as an alternative to left or right, it suggests we not tax ourselves then subsidize our favorites but recover and share society’s surplus, paying in land dues and getting back “rent” dividends, a la Alaska’s oil dividend. Letting rent go to the wrong pockets wreaks havoc, while redirecting it to everyone would solve our economic ills and the ills downstream from them.
People must learn to stop whining so much and feel enough self-esteem to demand a fair share of rent, society’s surplus, the commonwealth.

a neologism for sharing “rent” or “social surplus” – the money we spend on the nature we use. When we buy land, such as the land beneath a home, we typically pay the wrong person – the homeowner. Instead, since land cost us nothing to make and is the common heritage of us all, rather than pay the owner, we should pay ourselves, our neighbors, our community. That is, we should all pay land dues to the public treasury, then our government would pay us land dividends from this collected revenue. It’s similar to the Alaska oil dividend, almost $2,000 last year. Indeed, the annual rental value of land, oil, all other natural resources, including the broadcast spectrum and other government-granted permits such as corporate charters, totals several trillion dollars each year. It’s so much that some could be spent on basic social services, the rest parceled out as a dividend, as Tom Paine suggested, and taxes (except any on natural rents) could be abolished, as Thomas Jefferson suggested. Were we sharing Earth by sharing her worth, territorial disputes would be fewer, less intense, and more resolvable.

a POV that Spain’s president might try. A few blocks from my room in Madrid at a book fair to promote literacy, Sr Zapatero, while giving autographs and high fives to kids, said books are very expensive and he’d see about getting the value added tax on them cut down to zero. (El Pais, June 4; see, politicians can grasp geo-logic.) But why do we raise the cost of any useful product? Why not tax useless products? Even more basic: is being better than a costly tax good enough? Our favorite replacement for any tax is no tax: instead, run government like a business and charge full market value for the permits it issues, such as everything from corporate charters to emission allowances to resource leases. These pieces of paper are immensely valuable, yet now our steward, the state, gives them away for nearly free, absolutely free in some cases. Government is sitting on its own assets and needs merely to cash in by doing what any rational entity in the economy does – negotiate the best deal. Then with this profit, rather than fund more waste, pay the stakeholders, we citizenry, a dividend. Thereby geonomics gets rid of two huge problems. It replaces taxes with full-value fees and replaces subsidies for special interests with a Citizens Dividend for people in general. Neither left nor right, this reform is what both nature lovers and liberty lovers need to promote, right now.

of interest to Dave Lakhani, President Bold Approach (Mar 8) and Matt Ozga (Jan 29): “I write for the Washington Square News, the student run newspaper out of New York University. Geonomics seems like it has great significance, especially in this area. When was geonomics developed, and by whom?”
About 1982 I began. Two years later, Chilean Dr Manfred Max-Neef offered the term geonomics for Earth-friendly economics. In the mid-80s, a millionaire founded a Geonomics Institute on Middlebury College campus in Vermont re global trade. In the 1990s, CNBC cablecast a show, Geonomics, on world trade as it benefits world traders. My version of geonomics draws heavily from the American Henry George who wrote Progress & Poverty (1879) and won the mayoralty of New York but was denied his victory by Tammany Hall (1886). He in turn got lots from Brits David Ricardo, Adam Smith, and the French physiocrats of the 1700s. My version differs by focusing not on taxation but on the flow of rents for sites, resources, sinks, and government-granted privileges. Forgoing these trillions, we instead tax and subsidize, making waste cheap and sustainability expensive. To quit distorting price, replace taxes with “land dues” and replace subsidies with a Citizens Dividend.
Matt: “This idea of sharing rents sounds, if not explicitly socialist, at least at odds with some capitalist values (only the strong survive & prosper, etc). Is it fair to say that geonomics has some basis in socialist theory?”
A closer descriptor would be Christian. Beyond ethics into praxis, Alaska shares oil rent with residents, and they’re more libertarian than socialist. While individuals provide labor and capital, no one provides land while society generates its value. Rent is not private property but public property. Sharing Rent is predistribution, sharing it before an elite or state has a chance to get and misspend it, like a public REIT (Real Estate Investment Trust) paying dividends to its stakeholders – a perfectly capitalist model. What we should leave untaxed are our sales, salaries, and structures, things we do produce.

the annoying habit of seeing the hand of land in almost all transactions. In geonomics we maintain the distinction between the items bearing exchange value that come into being via human effort — wealth — and those that don’t — land. Keeping this distinction in the forefront makes it obvious that speculating in land drives sprawl, that hoarding land retards Third World development, that borrowing to buy land plus buildings engorges banks, that much so-called “interest” is quasi-rent, that the cost of land inflates faster than the price of produced goods and services, that over half of corporate profit is from real estate (Urban Land Institute, 1999). Summing up these analyses, geonomists offer a Grand Unifying Theory, that the flow of rent pulls all other indicators in its wake. Geonomics differs from economics as chemistry from alchemy, as astronomy from astrology.

in part the Great Green Tax Shift maxed out. Economically, taxing pollution and depletion does reduce pollutants and extracts – and thus the tax base; plus such taxes are regressive, requiring a safety net. On the other hand, collecting site rent is progressive and generates a revenue surplus payable as a dividend to residents, which can serve as the safety net. Environmentally, taxes on waste and extraction do not drive efficient use of land, as does getting site rent.

an answer for Jonathan of the Green Party (Nov 7): “What does ‘share our surplus’ mean?”Our surplus is the values that society generates synergistically. It’s the money we spend on the nature we use: on land sites, natural resources, EM spectrum, ecosystem services (assimilating pollutants). It’s also the money we pay to holders of government-granted privileges like corporate charters. We could share it by paying for the nature we use and privileges we hold to the public treasury then getting back a fair share of the recovered revenue. Used to be, owners did owe rent (“own” and “owe” used to be one word). And presently, some lucky residents do get back periodic dividends: Alaska’s oil dividend and Aspen Colorado’s housing assistance. Doing that, instead of subsidizing bads while taxing goods, is the essence of geonomics.
Jonathan: “Is local currency what you mean?”
Editor: It’s not. Community currency is a good reform, but every good reform pushes up site values. That makes land an even more tempting object of speculation. Now, any good will eventually do bad by widening the income gap – until you share land values.